Tuition

=__High-Tuition/High-Aid Model__ = =Allison Hill, Brittney O'Dell, Ashley Vance, & Kristen Whitney = ==


 * //Historical Foundations of the High-Tuition/High-Aid Model //**

Beginning in 1965, with the enactment of the Higher Education Act, the federal and state governments joined in an implicit partnership to make higher education affordable to all Americans. The states would keep tuition at public colleges low and the federal government would provide a means-tested system of grants and loans to insure that all students could meet those costs. In recent years, however, that partnership has come unraveled. Students today are relying more heavily on loans, and not grants (Paulsen & Smart, 2001).

The combination of rising prices and public concern over them has, in turn, generated substantial pressure on policy makers to take action to address the problem. Most of the public debate over declining college affordability has focused on the astronomical costs of the most expensive private colleges (Paulsen & Smart, 2001).

When financial aid does not increase as fast as tuition, states can gradually shift to a policy of high tuition without providing adequate aid for low-income students. Many states with generous need-based financial aid systems have at some point in the past described their system of financial aid as a high-tuition/high-aid model. (Hearn et al., 1996; Hearn and Longanecker, 1985). However, few states have made a formal link between tuition and financial aid. As the purchasing power of need-based grant programs has declined over time, many of these states have moved toward high-tuition, low-aid programs. As one study from the late 1990s documented, only four states had a formal link between aid levels and tuition (Hossler, Griswold, and Marine, 1997). In one of these states, Oregon, analysts commented that the loss of state funds due to the passage of a property tax reform had resulted in the state moving to a "//high-tuition and low-aid model//" (Hossler, Lund, Ramin, Westfall, and Irish, 1997).  The Public College Affordability Problem: To deal with rising costs and lowering levels of aid, one solution the state governments have considered is the high-tuition/high-aid pricing model. Essentially, states would shift funding of higher education to the institutions and towards need-based student aid. This changes forces the institutions to increase tuition prices, and the states have more money to use towards grant-based funding for needy students. In addition, the higher income students would find that their college costs were increasing. In a nutshell, students who can afford to pay the full cost of their education pay the same price as those who cannot (Paulsen & Smart, 2001). Policy experts overwhelmingly favor “high tuition/high financial aid” strategies that would concentrate public subsidies on those least able to afford college. While there is little support for free public higher education, the general public consistently favors low to moderate tuition with financial assistance for qualified and motivated students who are unable to afford college.


 * // The Current Situation //**

//Public college tuitions spikes// []

//Sour economy affecting students' college choice// []

//College students in CA are outraged by tuition increase// []

**//Cost-Side Factors include://**
 * //What is causing the increase in tuition?//**

 **//Demand-Side Factors include: //** 
 * decreases in the share of institutional revenues from state government appropriations
 * increases in the constant-dollar value of administrative expenditures per-student
 * increases in the constant-dollar value of student-services expenditures per-student
 * increases in the constant-dollar value of per-student expenditures on institutional aid
 * increases in the constant-dollar value of instructional expenditures per-student
 * <span style="color: #000080; font-family: Georgia,serif;">minimal or no growth in conventional measures of instructional productivity, such as the student-faculty ratio
 * <span style="color: #ff0000; font-family: Georgia,serif;">increases in the job-market opportunities for college graduates relative to high school graduates
 * <span style="color: #ff0000; font-family: Georgia,serif;">increases in the numbers of potential college-bound students, especially due to increases in the participation rates of students of traditional age, across different levels of income, levels of ability, and racial/ethnic groups; and increases in the numbers of students of non-traditional age and students attending part-time
 * <span style="color: #ff0000; font-family: Georgia,serif;">increases in the constant-dollar income of students and their families in the top income quintile, and to a lesser extent, in the next-to-the-top income quintile
 * <span style="color: #ff0000; font-family: Georgia,serif;">increases in the constant-dollar value of federal grants and loans to students
 * //High Tuition Impact on Institutions://**


 * First-time enrollees are found to be more price sensitive because of their lack of investment in a post-secondary education
 * Studies have also confirmed two relationships. First, at least among some groups, there was a positive association between levels of grant spending and enrollment rates. Second, the studies have confirmed a positive relationship between unemployment and enrollment.
 * Through an analysis of data for individual states from 1976-93, Heller [1996] addressed the relationship between tuition, financial aid, and access to public higher education in the U.S., in which financial aid acts as a price discount by lowering the net cost to enrollees. Therefore, its impact on the relationship between tuition and access to higher education is critical.
 * It was observed that higher unemployment rates bring more enrollments while higher wage rates cause enrollment to decline.
 * They concluded that family income, costs of alternative postsecondary options, academic ability of the student, and the alternative institutions' qualities for which the candidate was eligible, were the major factors affecting post-secondary choice of high school graduates.
 * The mean price response is about 0.7 percentage points and noted that U.S. enrollments would decline by about 2.1 percent for each $100 price increase
 * In comparison to middle and high-income families, low-income students were more sensitive to tuition and financial aid. Similarly, black students were more sensitive to tuition and aid than were white students.
 * Community college students show more sensitivity to tuition and aid in comparison to students of four-year public colleges and universities.
 * The most important finding of this study was that tuition considerations seem to have very little impact on students' enrollment decisions.

[]


 * [|http://www.eastwestcenter.org/fileadmin/resources/education/ed2020_docs/Heller-effects_of_tuition_and_financial_aid_-_pdf.pdf] **



media type="youtube" key="8ZnJRBZhqOM" height="525" width="660" align="center"

//**<span style="font-family: Georgia,serif;">Opinions on the Model **// The past several years have brought about significant changes within higher education funding. A little over 10 years ago, policy shifted from public financing of higher education to student funding. This meant that it shifted to a raise in tuition and more borrowing by the student. (Reindl and Redd, 1999) The general idea behind the high tuition/high aid model is to equalize access to higher education for all students regardless of their income level. Essentially, the price of tuition would be raised to such an extent that substantial financial aid could be provided to many more students, thereby making higher education more accessible to all students. The university will gain revenue from students whose families can afford to pay the increase in tuition prices, while students in need who cannot pay for these high tuition prices will get enough support to offset the higher tuition.
 * What are the possible problems with the High-Tuition/High-Aid Model? Some argue that the original premise of this model didn’t prove to provide access or quality education like once intended. **
 * The claim that the high tuition/high-aid model is actually making college more accessible to students from lower income backgrounds is actually being contradicted by schools who have already incorporated this model at their institutions. The University of Miami - Ohio, for example, implemented the high tuition/high-aid model in 2004 and the school experienced a 13% drop in in-state and a 10% drop in out-of-state enrollment. The decreases were coming from the “highest need” students.
 * The high tuition/high-aid model is actually making college less accessible for low income students. Although students may be able to get aid to cover most of their tuition costs, some are still not willing to take on this amount of debt. For students who come from families whose household income totals 30 thousand, the thought of being in debt to a sum close to that is unimaginable. At the University of Washington, the average student who takes out loans graduates with approximately 16,000 dollars in debt. A student with that amount of debt upon graduation can expect to pay a monthly payment of about 200 dollars. In order to afford that type of payment, you would have to graduate with a job that paid around $31,000 annually. The average University of Washington student graduates with a job that pays $26,112. It just doesn’t add up! And for a student who comes from a low socio economic status, this is just simply not a feasible option.
 * “Sticker shock” – many argue that students will not even consider schools an option for them as they shift to the high-tuition/high-aid model and they may lose low-income and under-represented minority students. Some students will see that a school has a tuition price of $30,000 a year and will cross it off their list of potential college choices immediately. They won’t even do any research on financial aid to see what may help offset the price, they will just write off the idea of attending that institution alltogether. University of Miami - Ohio Executive Financial Aid Director Pamela Fowler talks about the idea of sticker shock - “Our cost scares people away… it’s hard for [prospective students] to reconcile that, yes, we may be more expensive, but we give more financial aid. High “sticker” prices – total tuition amount before financial aid – deter students from enrolling for reasons including lack of knowledge about available aid packages, fear of incurring large sums of debt, or fear of burdening their families.”
 * Enrollment of high-performing students declines because of the increased competition with private institutions.
 * As institutions shift their funds in the struggle to maintain access, the quality of education decreases.

<span style="font-family: 'Georgia','serif';">Economists and politicians both favor the high tuition part more than the high aid part of the model’s formula. This will result in higher and higher tuition increases to fill the gap of the state’s needs for revenue supplementation, but with disregard to the higher levels of assistance necessary to meet the needs of low income students (Johnstone, 2004).

<span style="font-family: Georgia,serif;">**//Tuition Protests//** <span style="font-family: Georgia,serif; font-size: 16pt;">media type="youtube" key="tYNFUgk9-to" height="525" width="660"

<span style="font-family: 'Georgia','serif';"> Jim Hearn and others have shown in their research that this model repeatedly becomes well-liked under financial strains in the economy (Nishimura, 2009).
 * //<span style="font-family: 'Georgia','serif'; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman'; mso-font-kerning: 18.0pt;">Future Implications of the Model //**

In theory, by adopting this model, students who can afford the tuition will pay more and those who cannot will benefit from the financial aid packages backed by the tuition increase. However, evidence demonstrated by the universities who have implemented this model show it does not maintain accessibility for students nor quality in the schools (Nishimura, 2009).

The support from research on this model illustrates that applying a market-driven model of financing onto public higher education will wind up reducing accessibility for low-income students, bottom line (Washington Policy Watch, 2009).

**References**

<span style="font-family: 'Georgia','serif'; font-size: 10pt;">Baum, S,, McPherson, M., & Steele, P. (2008). //The Effectiveness of student aid policies: what the research tells us//. Retrieved from <span style="letter-spacing: 0.8pt; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">[]

Chang, G. C. and Ong-Dean, C. W., 2005-08-12 "The 'High-Fee, High-Loan' Model of Student Finance in U.S. Higher Education: Consequences for Low-Income Students" //Paper presented at the annual meeting of the American Sociological Association, Marriott Hotel, Loews Philadelphia Hotel, Philadelphia, PA// //Online// <PDF>. 2009-05-25 from []

Johnstone, B. (2004). The economics and politics of cost sharing in higher education: comparative perspectives. //Economics of Education Review//, (23), p.403-410.

Jones, D., Mortimer, K.P., Brinkman, P.T., L'Orange, H.P., Rasmussen, C., Voorhees, R.A., & Lingenfelter, P.E. (2003). Policies in sync: appropriations, tuition, and financial aid for higher education. Retrieved from <span style="letter-spacing: 0.8pt; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">[]

Nishimura, G. (2009). A failing grade: “High-tuition/high-aid”. Retrieved on April 1, 2010 from [|http://www.eoinline.org/education/reports/Faililng -Grade-High-Tuition-High-Aid-Apr09.pdf]

Paulsen, M.B., & Smart, J.C. (2001). //The Finance of higher education: theory, research, policy, & practice//. United States: Algora Publishing.

//<span style="font-family: 'Georgia','serif';">Policy makers consider failed “High-tuition/High-aid model for Washington colleges. //<span style="font-family: 'Georgia','serif';">(2009, April 8). Retrieved April 11, 2010, from: __ [] __

Washington Policy Watch (2009) High-tuition, high-aid: College financing sticker shock reduces access for low income students. Retrieved on April 1, 2010 from []

<span style="font-family: 'Georgia','serif';">Watkins, M. (2009, July 29). //High-tuition/high-aid college financing: sticker shock reduces access for low income students.// Retrieved April 12, 2010, from: __<span style="color: blue; font-family: 'Georgia','serif';">[] __

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